Intended Speaking Notes for the Debate
on Electricity from Renewables Viscount Hanworth
This report which we are debating on a Friday
afternoon at the end of a long parliamentary session, represents
a seemingly modest doorway which opens onto some of the most daunting
perspectives of the coming century.
The report on Electricity from Renewables
is concerned with the problem of how we should strive to reach
the targets that we have set ourselves for reducing our dependence
on fossil fuels.
The Government committed itself, at the Conference
on Climate Change at Kyoto in September of 1997, to a reduction
in our emissions of carbon dioxide of 12.5 per cent over a period
which runs from 1990 to some date within a target interval between
2008 and 2012.
The European communities have derived some more
specific targets. They have proposed that 5 per cent of their
electricity should be obtained from renewable energy sources by
the year 2003 and 10 per cent by the year 2010.
Amongst other matters, the report is intent
on assessing the likelihood of our meeting these EU targets. It
reaches the conclusion that, unless drastic action is taken, we
have no chance of attaining them.
Our government, in the persons of the Deputy
Prime Minister John Prescott and the Environment Minister Michael
Meacher, played a leading role in saving the Kyoto conference
They were faced with the unwillingness of some
of the industrial nations, notably the United States and Japan,
to commit themselves to taking any measures to reduce their emissions
of carbon dioxide.
The American negotiators were doubtful that
the US congress could be prevailed upon to ratify the Kyoto protocols,
given the powerful opposition of the members representing coal,
oil, steel and automobile interests.
The Third World countries, in turn, were unwilling
to help in overcoming a problem that was not of their own creating,
unless they were offered major inducements.
Their negotiators protested that they were being
asked to forego their own opportunities of industrial development
by renouncing the use of their available energy resources. This
they were refusing to do.
The US vice president Al Gore, said the Clinton
administration would not even send the treaty to the Senate unless
the Third World countries agree to its terms.
The outcome was a set of agreed emission targets
to which no nation seems to be seriously committed.
It may be worthwhile, at this point, to remind
ourselves of the magnitude of the threat to the global environment.
We seem to have moved very rapidly from the position where it
was reasonable to doubt the reality of this threat to the present
position where the inevitability of the impending disaster is
Since middle of the eighteenth century, which
marks the beginning of the industrial revolution, the burden of
atmospheric carbon dioxide has increased by 30 per cent from a
level of 275 parts per million by volume to a present level which
is in excess of 360 parts per million.
The present level exceeds anything which is
to be found in the Antarctic ice cores which contain a record
of carbon dioxide concentrations stretching back over 220,000
years which cover two glacial maxima and three interglacial periods,
including the present.
Simple atmospheric physics would suggest that,
with other things being equal, a change of this magnitude should
be accompanied by a global temperature increase of 1.5 Celsius.
The connection between carbon dioxide concentrations
and global temperatures was made as long ago as the 1880s by the
Swedish physicist Svante Arrhenius who calculated the changes
of concentration which would be necessary to produce an Ice age.
I shall briefly describe the likely effects
of the present and the predicted future temperature changes in
In fact, until the early 1990s we had witnessed
a temperature change of only 0.7 degrees centigrade. The truth
is that the matter is vastly more complicated than the simple
physics would suggest.
There are all sorts of positive and negative
feedback processes to be taken into account which might serve
to exacerbate or to mitigate the effects of the anthropogenic
emissions of carbon dioxide.
If one looks at the record of the Northern hemisphere
temperatures of this century, one finds that, from the 1930s until
the 1970s, the average temperature was actually declining quite
The reason for this decline is somewhat ironic.
It has to do with the thermal reflectivity of an increased cloud
cover which was due to the presence in the atmosphere of the dust
and the particulate sulphates which come from burning fossil fuelsfrom
coal burning in particular.
Now this temporary hiatus in the upward trend
is over; and temperatures are increasing with unprecedented speed.
This week, we have heard of some tentative projections of the
Hadley Centre for Climatic Research which suggest that temperature
may rise by as much as eight degrees over some land masses by
the end of next century. This is 2.5 degrees more than previously
Such temperature rises would set in motion some
rapid processes of positive feedback. The melting of the Arctic
permafrost, for example, would release to the atmosphere vast
quantities of methane which are presently trapped in the tundra.
As the report of renewables testifies in another
connection, the contribution of methane to global warming is some
twenty times greater than that of carbon dioxide when the two
gases are compared mole for mole or volume for volume.
In order to illustrate the effects of global
warming, let me mention just one aspect. A figure which is commonly
quoted for the rise in sea level consequent upon an increase in
average global temperature is (25 +- 15) cm per degree Celsius.
This suggests a sea level change of between 30 cm and 120 cm for
a temperature rise of three degrees.
If oceans rise too rapidly, we would simply
have to abandon the inundated land and cities. It has been estimated
that a sea-level rise of one metre would threaten about five million
square kilometres of land, which represents about 3 per cent of
the world's total land area. However, under current climatic conditions
this represents a very substantial proportion (about 30 per cent)
of the productive crop land, which lies mainly in river valleys
and flood plains.
The magnitude of the problem is clear, but our
response is negligible. It is not hard to understand why this
should be so. There are no global political organisations which
are equal to the task of averting the disaster. It is pointless
for any one nation to act on its own when it is fearful of the
derelictions of the other nations which would be required to act
in concert. Therefore, the problem is liable to be ignored and
put out of mind for as long as possible.
Governments which are new to office might be
expected to address the problem with vigour and with optimism;
but, within a very short while, their attitudes are liable to
be tempered by the political realities.
Do I dare to suggest that this is what has happened
in the case of our own government? I should say, at least, that
the suspicion has been aroused. But I am more optimistic that
they will take action than it might, at first, appear.
My reason for optimism is that I perceive that
our energy policy is fundamentally unviable, even in the medium
term; and I believe it is bound to be revised drastically. I would
expect this to happen sooner rather than later.
The fact is that we are dependent, as is no
other European nation, on oil and gas for our primary sources
of energy. Within a very short while, perhaps within the life
span of a modern jumbo jet, we will be confronted with the exhaustion
of our own local supplies.
We shall need to find replacements; and, in
a world of increased international tensions, we should be ill-advised
to depend largely on foreign supplies. In short, we should be
compelled by the political realities of our situation to seek
to reduce drastically our dependence on fossil fuels.
If this scenario is to be believed, then there
can be no doubt of the importance of the Select Committee's report
on the use of renewable energy sources in generating electricity.
The report spells out with great clarity the various options which
are available to us in seeking to replace the fossil fuels.
The overall impression which it gives is that
none of the options taken singly or in combination are capable
of satisfying more than a small proportion of our present demands
for energy. The limit of what they can provide is perhaps 25 per
cent of our current demands.
Clearly, either we must reduce our demands drastically
or we else must look elsewhere. The conclusion which is staring
us in the face is unpalatable to many of us. It is that we are
bound to resort to nuclear fuels if we wish to maintain our level
of energy consumption. This is surely a political reality; and
the sooner we face it the better.
It is to be hoped that we will approach the
hazards of nuclear power generation and waste disposal with more
honesty and more caution that hitherto. What seemed, in its early
years, to be the greatest gift of twentieth century technology
is likely to be seen, in future, as the doubtful benefit of a
Faustian bargain which was made under duress.
Arrhenius, Svante August (h, Feb 19 1859; Wijk near
Uppsala, Sweden, d. Oct 2, 1927; Stockholm) Swedish physical chemist.
House of Lords Select Committee on the European Communities,
Electricity from Renewables HL paper 78-1
Letter from Baroness Sharp
of Guildford to Lord Sainsbury of Turville
I gather that it has been proposed that, rather
than take up the debate on renewable electricity which we abandoned
last Friday after the unfortunate collapse of Lord Montague, Baroness
Buscombe and I should write to you setting out the main points
we would have made in our winding-up speeches. You will then send
us a joint reply which will be placed in the Library.
I am happy with these proposals and set out
below the main points I wished to raise.
1. As things stand, Britain is not doing
enough to fulfil her Kyoto commitment to cut CO2 emissions by
2010 by 20 per cent. Indeed we shall be lucky if we meet the legally
binding target of 12.5 per cent, although this should be easy
given the "dash for gas" and switch from coal. We are
even further off meeting the 10 per cent target for renewable
electricitycurrently only 2.5 per cent of electricity now
comes from renewables (of which 1.5 per cent comes from old hydro)
and with the ending of the NFO regime renewable capacity coming
on stream will be falling. As the report stresses we need a sevenfold
increase in the rate of installation now if we are to meet our
2. This failure is serious. Evidence mounts
by the day that global warming is "for real" and is
being accelerated by the rising emissions of greenhouse gases.
Unless the developed world shoulders its responsibilities and
makes a serious effort to cut emissions, the steady industrialisation
of the developing world will accelerate this process yet further.
Britain must join countries like Germany and Denmark in setting
a good example. Only then can we bring pressure to bear on the
US to sign up to Kyoto and do its part too.
3. The last ten years have seen a remarkable
change in the economics of renewables. We are now looking at costs
per KwH from wind-power at 2\8P; from landfill at 2\7P per KwH
and from waster incineration of 2\3P per KwH. Such costs are wholly
competitive with gas or coal burning power stations. Other technologiesoffshore
wind power; small hydro; solar; photo-voltaics; tidal streammight
well become viable if they were developed at a greater scale.
As Lord Williams of Elvel stressed, for most it is a question
of scaleas long as production is small scale it will be
expensive, the price will be high and the demand small. The NFFO
regime in the UK has given this technology a boost, but by requiring
always the cheapest option picked up wind-power (where Danish
government backing had pushed production over the scale threshold)
and opted for the windiest land-based sites which unfortunately
proved almost always to be on the tops of hills which were designated
as areas of outstanding natural beauty! They don't have to be
sited in such placesmost are in fact a good deal better
looking than the 22,000 large grid pylons currently littering
4. It is not therefore difficult for Britain,
if there is the political will, to meet its Kyoto and renewables
targets. Given the urgency of the issue one might have expected
the Government to be mounting a "Campaign for Renewables".
Sadly, as the Select Committee report shows so clearly, the Government
is in a shambles on this issue. There is no campaign, no strategy,
no urgency. You are phasing out the NFFO regime, yet as Lord Montague
had pointed out so clearly in his speech, you have left the industry
in a fog of uncertainty as to what is going to happen for over
a yearhardly conducive to encouraging private sector investment
in this sector. The DTI Consultation Paper had clearly not explored
the options or costs on renewables. (See paragraph 354 of the
report, which criticises the DTI for its failure to try to cost
the various options.) Whilst the DTI is supposedly trying to promote
renewable energy, the DETR slaps them down with planning controls
and the MOD has objected on one ground or another to two out of
10 of the schemes put forward. Now the Government are proposing
to inroduce a Climate Change Levy, but imposing it on renewable
energy as well as fossil fuel energy. What a catalogue of ineptitude!
Where, oh where, is that joined-up government we all heard so
much about three years ago?
5. What then would the Liberal Democrats
First, we would like to see
a "Campaign for Renewables" with perhaps one of your
"czars" in charge of it with power to cut through the
departmental red tape and get things moving. The French would
call it a Mobilisation Programme.
Secondly, we want to see a
rapid decision on the post-NFFO support mechanism so that the
momentum built up under that programme is not lost. This should
not always just back up the cheapest optionviz onshore
wind powerbut should be prepared to put resources into
helping other options get over the scale barrier. The Danes and
Germans, as a result of their early support for wind-power, now
dominate the technology and are benefiting from exporting it to
countries like Britain. There are benefits to be gained from being
prepared to put patient capital into some of these new technologies.
Thirdly, some way must be
found of making sure that the contracts granted under NFFO 3,
4 and 5 see their way through to commissioned capacity. It will
make a nonsense of the NFFO regime if the Government now turns
a blind eye to the failure to commissionindeed, there is
a case for considering penalties for those who have benefited
from contracts but are not commissioning renewable plant.
Fourthly, as in Denmark, encourage
the local communities to make these investments in renewables.
This technology is at its most competitive when it feeds into
the local distribution network and with nimbyism so strong an
issue in planning decisions there is a great deal to be said for
giving local communities the incentive to make such investments
and letting them sort the planning issues out for themselves.
Lord Cathcart spoke of the experiments he had encouraged in the
Breckland District Council and others spoke of a possible role
for RDAs. Indeed, this is just the sort of project an RDA might
be encouraged to develop in partnership with one of the local
Electricity Supply Providers. But unless and until the Government
is prepared to give the RDAs real resources (and/or power to go
to the market to raise real resources) and the headroom to take
initiatives of this sort, they will get nowhere.
Fifthly, the regulatory framework
must be right. It must be neutral as between renewables and other
sources of powerwhich means that issues relating to embeddedness
and net tariffs must be sorted out. And renewables must be given
full access to the grid, even for very small contributions. We
support the idea of taxing those sources of energy which impose
extra costs on society through pollution, but favour a tax based
on carbon emissions, not the indiscriminate Climate Change Levy
proposed. A real effort needs to be made to sort out the planning
issues, but ideally through involving the local community in the
And, finally, emphasis needs
to be put on energy efficiency as well as energy use. The average
house in London takes four times the energy of the average house
in Stockholm to heat even though Stockholm is much colder than
London in winter. Conservation, as Lord Methuen reminded us, remains
the largest potential source of savings and the best way to cut
back on CO2 emissions. We still have 17.5 per cent VAT on insulation
materials; the Energy Savings Trust needs much more support and
resources if it is to do its job properlythere's a strong
case, for example, for channelling some of the Climate Change
Levy directly into the EST. And, again to be organised through
local consortia, Combined Heat and Power schemes have considerable
potential and merit incentives.
The Liberal Democrats regard "getting the
environment right" as the most important challenge facing
the UK in the next 50 years. It cannot be left to the market because
the externalities are too great. This means Government has to
take the lead. And it has to be tackled on a global basis because
unilateral action, while not useless, will not solve the problem.
This means the targets we set ourselves at conferences such as
Rio and Kyoto have to be honoured. At present too many countries,
including the US, are ignoring these targets. But there is no
excuse for Britain to renege on its targets, and we lose the right
to put pressure on others if we do so. The new changes in the
electricity regime now being introduced give us another opportunity
to show that we mean business. Sadly, as the Government's response
to the Select Committee's report illustrates so well, there is
no indication that this Government recognises the seriousness
of the situation or is prepared to give the lead necessary if
Britain is to seize the opportunities open to us. Instead, it
suggests incredible complacency about the whole situation.
I hope you will write to say I have got it wrong
and that the Government is prepared to take strong and bold action
and, above all, is willing to give the leadership that this issue
so badly needs. I look forward to hearing from you.
11 November 1999
May I begin by congratulating my Noble friend
Earl Lord Cathcart upon his excellent maiden speech.
May I commend the valuable work undertaken by
Sub-Committee B of the European Communities Committee of your
Lordships House in producing this excellent report on Electricity
And I congratulate my Noble friend the Lord
Geddes on his Chairmanship of the Committee and for introducing
This, for me, is a humbling experience following
on from speeches made by Noble Lords with such a wealth of skills
and experience in this field; and now of course we know since
the beginning of this debate, that some of those most valuable,
articulate skills given selflessly and quietly are to be lost
from the House, a House that is the poorer for that.
We are talking about a field which is growing
in importance and needs now to be supported and nurtured not just
by governments, but companies and individuals must be persuaded
that energy produced from evolving, diverse sources including
waste makes so much sense.
If we are to meet the binding Kyoto targets
it is necessary, as said by my Noble friend Lord Geddes, to encourage
Reduce energy consumption;
Improve efficiency in both energy
and use; and
Increase the proportion of energy
from renewable sources.
In order to achieve real progress in all these
areas there is no doubt that targets are necessary. However, the
question has been asked this morning whether a target for the
United Kingdom to derive 10 per cent of its electricity from renewables
by 2010, whilst technically possible, is really achievable?
We have heard that it is achievable with a sustained
seven-fold increase in the average rate of installing renewable
This is frankly, a tall order and would require
a dramatic change overnight in attitude, awareness, indeed excitement
in energy renewables to make this happen.
As my Noble friend the Earl Cathcart said, "it
is the attitudes of those who determine the planning process that
need to change."
How do we excite those responsible, for example,
for local planning policies and moreover planning inspectors who
are often persuaded by local prejudice, which is not always backed
up by knowledge of technological developments. There is no doubt
that technology is reducing the negative impact of some energy
sources on the environment and on our quality of life
reduction in noise levels of wind power is just one positive development.
As my Noble friend Lord Geddes has made clear
today, it was possible for the Committee to only touch upon important
environmental issues lightly in compiling its Report. However,
it is clear that careful and thoughtful consideration was given
to renewable energy resources derived from non-fossil fuel sourceswind,
waste and other biomass, hydro, waste, tidal, solar and geothermal.
Many of your Lordships have referred to the
importance of wind energyits challenges and its opportunities
In their submission to the Select Committee,
the British Wind Energy Association calculated that approximately
6 per cent of 2010's anticipated electricity demand could be met
by the existing wind energy industry. (Select Committee on the
European Communities, Electricity from Renewables volume II, Evidence,
29 June 1999, pg 23)
Visual impactthis causes the
most controversy and complaint;
Noisealthough, as I have already
said, this has in fact been much reduced by new technology;
the turbine is placed between a transmitter and a receiver used
in telecommunications it can reflect some of the radiation. This
distorts the signal;
Safetyalbeit, I understand
this is fairly minimal;
Birdsagain I believe this
The visual impact can be removed by offshore
wind turbine plants.
I agree with other speakers and the Select Committee
(Select Committee on the European Communities, Electricity from
Renewables, 29 June 1999, pg 40) that onshore and particularly
offshore wind energy must be more fully developed than at present.
I agree with the Right Reverend Prelate The
Bishop of Hereford that "really offshore" is an attractive
alternative, given the removal of visual impact. And, I would
like to hear from the Minister today, what the Government is doing
to exploit offshore wind, as a means of generating electricity,
given it is important to develop a good mix of offshore and onshore
energy combined with other sources?
Yestoo controversial and too costly in
the short term, as expressed by the Noble Earl Lord Stair, however,
all new developments, if they are to be on a scale worthwhile
are, may I suggest, bound to be controversial and bound to be
costly. However, quantity and the continuing development of technology
will, there is little doubt, reduce cost over a period of time.
Controversythat must be met by increased
awareness and understanding of the need to respond to environmental
changes, and our will to reduce our reliance on fossil fuels.
We must also confront what the noble Lord Montague of Oxford raised
I understand that although considerable research
funding for wave energy has been provided, notably by Britain
in the 1980s, there are no commercial devices yet available. The
principal drawback is the complexity of the devices needed to
convert the oscillatory motion of waves into a steady rotary motion.
Like wind energy, the flow of tidal streams
and marine currents can be harnessed.
Question: The Committee suggests that those
involved in tidal streams should consider with offshore wind providers
the scope for sites combining their technologies. I hope that
the Minister will be able to tell us today what the Government
is doing to encourage this.
With Hydro Power I note that the Committee suggests
that hydroelectric power is a well-established form of renewable
energy with no polluting discharges.
Across the EU, approximately 307 TWh of hydro
energy is produced from an overall capacity of 92GW. Large scale
hydro plants account form 90 per cent of installed capacity. In
the UK, approximately 2 per cent of electricity is generated from
Hydro Electric Plants. 
The World Wildlife Fund (WWF) for Nature believes
that it is unlikely that large and medium scale hydro schemes
will be further developed in the UK because most of the suitable
sites have already been developed. It is the WWF's view that future
developments are likely to be on small scale (those under 10MW).
The Committee recommended that "the Government
review the nature and operation of the planning and consent structures
for small hydro proposals, with the aim of co-ordinating and streamlining
the involvement of the wide range of interested bodies."
With Tidal Barrages, notwithstanding a suggestion
today that the Severn Barrage be developed now. I note that the
Committee recommends the Government keep this source under review.
The energy potential of direct energy from the
sun is enormous, but most uses of solar energy are from heat.
Passive solar applications involve design concepts to enable buildings
to make the most of the sun's light and heat, displacing electric
lighting and heat generated by non-renewable sources.
Active use of solar energy, through solar thermal
technology, concentrates the sun's heat in collectors to provide
hot water for domestic use, swimming pools and space heating.
There has also been a small amount of research
into solar thermal-electric technology, in which mirrors are used
to concentrate the sun's heat to generate steam for electricity
The Committee suggests on energy from waste:
"as waste combustion and landfill gas are two sides of the
same coin, we strongly encourage the development of policies which
allow an integrated approach to energy from waste."
Question: What is the Government doing to encourage
the burning of landfill gas to generate electricity?
This is fairly low profile form of renewable
energy and I note that the Committee "do not see how energy
crops could make a signficant cost-effective contribution to renewable
energy targets for 2010" (Select Committee on the European
Communities, Electricity from Renewables, 29 June 1999,
However, I think it is important in the overall
picture to note initiatives such as that referred to by The Right
Reverend Prelate The Bishop of Hereford whereby local coppicing
of timber contributes to local employment and a sense of pride.
With regard to photovoltaics the Committee suggests
that the contribution of photovoltaics to UK electricity supplies
by 2010 is likely to be small. (Select Committee on the European
Communities, Electricity from Renewables, 29 June 1999,
However, there are important implications for
British industryas stated by my noble friend Lord Geddes
and the noble Lord Williams of Elvel. There are a number of examples
of initiatives taken already including that referred to by the
noble Lord Methuen of Northumbria which demonstrates that this
could, with the necessary commitment and drive from the Government,
working in partnership with the industry, become commercially
viable. The initiative referred to by the noble Lord Berkeley,
implemented by Greenpeace, clearly demonstrates some of the problems
that we are up against in trying to develop renewables. I would
like to refer briefly to another initiative to illustrate what
can be achieved:
My Lords, a successful bid to the Technical
Foresight Panel on energy resulted in the development of a programme
known as the "Scholar Programme" where 20 companies
combined their expertise and knowledge to put a PV (as they are
known) panel into up to 100 schools around the UK so that they
could see how energy could be produced from the suneven
in the United Kingdomand ultimately to let them sell their
energythat is, the power that they have createdto
This was an excellent scheme to:
1. attain public support and;
2. act as a practical educational opportunity
so that the next generation could understand and appreciate where
energy comes from and its importance to the nation. Those that
have installed PV panels in the roofs of their homes like Susan
Roaf in Oxford and Tony Marmont in Leicestershire have shown that
there is a real role for solar panels in the United Kingdom and
an even greater role for it worldwide.
It doesn't take an awful lot of incentive with
initiatives like this so as to provide much needed power to developing
countries where energy cannot be taken for granted.
Also, by involving the young in these kinds
of projects we are preparing for the time when energy supply,
as it is, will no longer be as cheaply and readily available as
it is today.
Question: I should like to ask the Minister
how the Government is planning to help promote the European Photovoltaics
Conference, which is being held in Glasgow next year as a result
of the hard work of the British Photovoltaics Association?This
represents something of a coup for the United Kingdom in developing
the United Kingdom's renewable energy.
Question: Where is the support from the Government
for this important and emerging industry, which can play such
a part on the global stage?
On 31 October the Conservative Party launched
a campaign called "Common Sense for the Environment Town
As part of this campaign we pledge that we will
generate more of our energy from clean and renewable sources.
Our campaign criticises the Government's approach
and I quote "Labour's interest in reducing pollution and
carbon dioxide emissions is just an excuse for new stealth taxes.
Their lack of sincerity is reflected by the fact that their new
energy tax (or climate change levy) fails to distinguish between
renewable and non-renewable sourcesthat is, between low
emission and high emission types of power".
Whilst noting the Government's targets it is
clear that they have failed to put Britain in the forefront of
this vitally important market.
Take solar powerwhere is their commitment?
How are they responding to the reality that new technology allows
it to be viable in Britain? Germany now has a target of 100,000
solar powered buildings. The Japanese have a target of 70,000.
Britain's New Labour Governmentthe supposed "Greenest
Government in British History" has a target of just 100.
In response to this lack of commitment we are
now establishing a Commission on Renewable Energy under the chairmanship
of Damian Green MP to call upon expert advice from the domestic
industry, from financiers and from practitioners around the world
to develop policies which would encourage greater use of renewable
energy. This Commission will feed its thoughts into the policy
making process to ensure that renewable energy gains its rightful
place in the electricity generation mix.
In conclusion my Lords, as my noble friend Lord
Geddes said in opening this debate "| action is needed now."
This was followed by the noble Lord Williams "Action on an
I hope that the Minister will respond to my
noble friend Lord Cranbrook's proposal for a national consensus
conference to take place nowwithout, as he said, preconditions,
in order to immediately focus upon what energy renewables are
needed, where they should be placed, where they will be acceptable
so this process, can as again my noble friend Lord Cranbook said
so ably today "| march with the speed that is necessary."
This need for action is not as was suggested
by the Right Reverend Prelate the Bishop of Hereford "| panic
driven |" it is, as the noble Lord Paul said "| about
the human prospect, the improvement of the quality of human life."
My Lords, it is a sensible response to the changing world in which
I commend the report to this House.
I beg to move.
5 November 1999
Debate in the House of Lords on 5 November
on Electricity from Renewables
Reply on behalf of the Government by Lord
My Lords, may I thank the Committee for their
excellent investigation into renewable energy. May I also congratulate
Earl Cathcart on his excellent maiden speech. It exemplified everything
for which speeches in this House are famouscareful analysis,
practical experience and wisdom.
The Select Committee's report highlights the
important contribution which renewables can make to energy and
environmental goals both within the EU as a whole, and in the
UK, and the scale of the challenge we face in delivering those
objectives. The report has also flagged up a number of key issues
which we will need to address as part of our policy of working
towards a 10 per cent renewable contribution to UK electricity
supplies. In particular the Committee has drawn our attention
to the planning issues, the importance of public perception and
the need to develop a new support mechanism in the reformed electricity
Most importantly perhaps, they remind us that
the challenges of sustainable development and climate change will
require a wide ranging and integrated set of policies and programmes
of which renewable energy is but one element, albeit a very important
one. And our environmental goals are certainly challenging, as
Lady Sharp and Viscount Hanworth reminded us. We are committed
to a 12.5 per cent reduction in greenhouse gases by 2012 and are
looking to move towards a domestic aim of a 20 per cent reduction
in carbon dioxide by 2010. These can only serve to increase the
importance we shall be attaching to renewable energy in future.
As Lord Geddes reminded us, the Committee's
inquiry into renewable energy was first sparked by a draft Directive
on fair access for renewables to electricity grids. This was expected
in January, as the Committee launched its inquiry, but failed
to materialise. The Commission tried to fill the gap by producing
a working paper which considered various options and asking whether
a Directive was needed. The Energy Council clearly thought it
was and in May invited the Commission to come forward with concrete
proposals as soon as possible.
Although the Commission has yet to adopt a proposal,
we expect that a draft Directive will be presented to the next
Energy Council on 2 December. Your Lordships will be informed
of the details through the normal scrutiny arrangements.
UK TARGETS AND
Renewable energy has an important and growing
contribution to make to secure, diverse and sustainable energy
supplies and to reducing greenhouse gas emissions.
We have set targets for this and are already
on course to achieve a 5 per cent contribution to UK electricity
supplies by 2003, compared to our present figure of 2.5 per cent.
We are now working towards a target of meeting 10 per cent of
our electricity demand from renewables as soon as possible, and
hope to achieve this by 2010. I accept that industry needs certainty,
but we must accept that, in this field, there is bound to be some
uncertainty about the future cost of current sources of energy,
about new technologies and their costs. It is not possible to
be more specific over this time frame at this stage without committing
the Government to open-ended financial commitments.
The Government expects to publish its draft
Climate Change programme around the turn of the year. That will
include renewables. A more detailed statement of renewables policy
will also follow and will set out our programme and targets.
I totally agree with Lord Geddes that policies
to promote renewable energy and take us towards our 10 per cent
target need to be developed in the context of our wider economic,
energy and environmental policies. As noble lords have rightly
made clear, energy efficiency and conservation are key to achieving
our climate change targets.
Since coming to Office we have taken forward
a raft of initiatives which will give a significant boost to renewables.
Last September we announced the fifth and largest ever NFFO Order
for some 260 projects and nearly 1,200 MW of capacity. Earlier
this year we announced the third Scottish Renewables Order. We
have reversed the downward trend in Government expenditure on
research and development and launched a new initiative to support
wave energy development. Spent on renewables R&D in 1998-99
was £9.7 million, rising to a budget of £18 million
in 2001-02. We are pressing ahead with reforms of the energy markets
and are taking forward a regional approach to planning through
regional sustainable development frameworks and targets. We have
published proposals for a Climate Change Levy and a major consultation
paper on the further steps we may need to take and the balance
of measures we should adopt to further promote renewables development.
These are not woolly proposals northough I'm no cricketera
woolly dead bat. The issues we are dealing with are complex. No
energy source is without problems and I plead guilty to approaching
these problems with care and detailed analysis.
We are now considering the responses to our
consultation papersome 260 of themand continue to
receive representations from the key players. This consultative,
democratic route, rather than a one-off consensus conference,
is our preferred approach. The Committee's report is a welcome
and informed contribution to this debate.
Renewable energy use in the UK has more than
doubled since 1990. The existing NFFO mechanism has been successful
in creating an initial market for renewables and in driving down
costs, particularly for those technologies closest to the market
such as landfill gas, energy from waste, hydro and onshore wind.
We now have just over 700MW of renewable generation
installed over and above large scale hydro. To achieve the Government's
two targets of 5 per cent and 10 per cent, we need to increase
this to approaching 2,000MW by 2003 and perhaps by as much as
a further 4,000MW between 2003 and 2010.
The Committee was of the view, and Lord Geddes
raised the point, that Government's renewable energy targets will
not be met under current arrangements. The Government is, however,
confident that existing NFFO Orders will enable us to meet the
2003 target. Around 3,500MW are contracted under NFFO. In answer
to Lord Geddes' question, total renewable energy use increased
by a little over 14 per cent between 1997 and 1998. Less than
one-third of this came from all forms of hydro. Municipal solid
waste and wind each increased by over 30 per cent. Landfill gas
increased by over 25 per cent. Can I remind noble Lords that the
NFFO-5 Order, laid only in September 1998, was the largest ever.
In addition a third Scottish Order was laid early this year.
But we recognise that maintaining the integrity
of existing NFFO contracts in the reformed electricity market
is key to achieving the 5 per cent targetand thus our longer
term goals. In answer to my noble friend, Lord Williams, this
means that the Government intends to ensure that, following the
proposed separation of the supply and distribution functions of
the Public Electricity Supply companies, the existing NFFO contracts
between PESs and renewables generators will continue to be honoured
and aims to ensure that contracts which are commercially viable
now remain so under the new arrangements. We are committed to
this and are discussing a number of options with those concerned.
Officials met industry representatives on this very issue only
10 PER CENT
Having said that, the 10 per cent target is,
of course, ambitious and challenging and will, indeed, require
a very significant increase in the rate of investment in renewables.
We will need to treble our current renewable energy use.
To stimulate this, the Government will be taking new powers
as soon as the legislative opportunity arises. Most importantly,
the powers we envisage will enable us to require the electricity
industry to increase the proportion of electricity generated from
renewable sources over time. It will, of course, be vital for
industry and investors to take advantage of this opportunity and
to rise to the challenge.
Let me say something about the new technologies.
The achievement of the Government's target will
require a significant further contribution from onshore wind.
The Committee has suggested that there should be a general planning
presumption in favour of wind farms but this is not favoured by
Government. Our proposal for a regional approach to planning is
more likely to win popular support.
The Government believes that offshore wind has
an exciting future. It is a vital component of the Government's
future strategy on renewables and will need to make a substantial
contribution to future targets. To answer Lady Buscombe's point,
at the moment the Government is looking into consents procedures,
licensing and environmental appraisal for offshore wind farms
and is discussing with industry what further R&D is needed
to support offshore development. The location of offshore wind
farms will reflect the suitability of particular sites, companies'
wishes and the availability of the various consents. Lady Buscombe
also suggests combining offshore wind and tidal stream (or marine
current) technologies. Renewable energy developers are already
considering the scope for combining technologies such as wave
and offshore wind. However, combining technologies at a very early
stage of development with those at a more advanced stage of development
may not be commercially attractive and optimum siting may not
always be co-incidental. We may, therefore, have to wait some
time to see commercial projects of this nature.
The Government welcomes the Committee's view
that landfill gas can make a worthwhile contribution towards renewables
targets. I would draw your attention, though, to the potential
impact of the EC Directive on landfill which, while helping to
maximise landfill gas recovery at sites, also lays down binding
targets to reduce the amount of municipal waste going to landfill
which, in turn, will reduce the amount of methane generated. To
cover the specific points raised by Lady Buscombe, a recent study
suggests that methane emissions from landfill are lower than previously
estimated, and are expected to reduce until 2010, taking into
account planned measures such as the EC Directive I have just
mentioned. This again highlights that the potential of landfill
gas as an energy source may be limited to an extent in future
years. These results are being considered within the Government's
sustainable energy policy.
The Government agrees with the Committee's view
that the contribution of photovoltaics to UK electricity supplies
by 2010 is likely to be small. Current opportunites lie mainly
in export markets while, longer term, building integrated photovoltaics
may well begin to grow in the UK market but not to any great extent
before 2010. In the meantime, the Government is concentrating
on increasing the competitiveness of the industry and in developing
the technology, information and skills needed for more widespread
adoption of building integrated photovoltaics in the longer term.
This Government, to answer Lady Buscombe's points, has increased
R&D spending on photovoltaics from £1.1 million in 1998-99
to a budgeted £2.5 million in 2001-02; is supportive of the
European Photovoltaics Conference to be held in Glasgow next year
and will be providing £30,000 towards its costs.
Photovoltaics are still very expensive compared
to electricity generated from conventional sources, and also compared
to other renewables such as wind and biomass. It costs £10,000
to £15,000 to put PV panels on the roof of a typical family
house, and over the life of the panels this works out at a cost
of 35-50p per unit, compared to the average retail price of electricity
of 7-8p per unit.
Advocates of photovoltaics argue that the electricity
companies should pay domestic consumers the same price for surplus
electricity which is exported to the grid as they charge customers
for the electricity which they supply. This is referred to as
net metering. While the Government wishes to ensure that small
renewable energy generators such as generators of PV get the full
value of their generation, there are technical difficulties. There
is the question of imbalances and it is not obvious that for net
metering, the buying and selling prices of PV-generated electricity
should, uniquely, be the same. The Government is currently considering
how renewables might be treated under the Utilities Bill, including
the issue of net metering.
The energy crop with the greatest potential
is short-rotation coppice. Given the heavy cost of establishment
(about £1,850 per hectare), farmers may be unwilling to establish
these crops in preference to other subsidised agricultural activities.
But costs will fall as plantings increase. At present the Forestry
Commission pay a planting grant (£400 per hectare, or £600
per hectare on non set-aside land). We are considering the future
need for support in the light of the Commission's White Paper
on Renewable Energy Resources.
The Government is keeping developments in tidal
barrages under review but has currently categorised this as a
very long term technology unlikely to be worth pursuing at the
present time for economic and environmental reasons.
The Government does not propose to tax renewables
used as energy sources in their own rightfor example for
the production of heat.
Many of those who responded to the Customs and
Excise consultation exercise on the proposed levy thought that
electricity from renewable energy should also be exempt and the
Government is currently looking at this and at ways of giving
further encouragement to good quality energy efficient combined
heat and power schemes to reflect the potential environmental
gains from such schemes. Any exemptions agreed would need to be
legally robust and take account of the need for equal treatment
for imported electricity. In addition the Government has proposed
that £50 million should be used to promote energy efficiency
and renewable energy and the Government is currently considering
how this funding could be used to best effect. £50 million
for this is the figure for the first year of the Climate Change
I mentioned earlier a number of key issues explored
by the Committee and would now like to focus on planning which
was seen by Lord Geddes as another area lacking in clarity. This
is a point of considerable controversy as Lord Judd, Lord Williams
and the Bishop of Hereford made clear, and I was very interested
in Earl Cathcart's, Lord Berkeley's and Lady Buscombe's comments
on the planning system. Waste incinerators, tidal barrages, wind
power and wave power all have problems, and the only way to move
ahead is to get the support of local people. The Government is
not convinced that a highly centralised, top-down approach is
the right one and has instead adopted a new regional approach
to renewable energy targets and planning.
The regional sustainable development frameworks
that are about to be prepared will include targets on renewable
energy from each region, reflecting the contribution proposed
from each renewable energy resource. In answer to the points made
by my noble friends, Lady Sharp and Lord Judd, it is expected
that the regional frameworks will have the support of a wide range
of local stakeholders, including Regional Development Agencies,
and will set the context for regional planning guidance. This
regional planning guidance will include targets for the region
and define both areas suitable for renewables development and
criteria for site selection.
This means that the updated regional planning
guidance will inform the treatment of renewable energy projects
in Local Authority development plans. This, in turn, will feed
through into decisions on individual planning applications. The
expectation would be that a proposal that conformed with the development
plan would succeed unless material considerations dictated otherwise.
Allied to this is the need highlighted by the
Committee for much greater public awareness of the case for renewable
energy. A better understanding of the benefits of renewable energy
is particularly important when contemplating developments that
bring local impacts if a "not in my back yard" approach
is to be avoided. Sensitive siting of the developments and greater
dialogue between developers, planners and the public is also important.
Winning popular support for renewables is a task not to be underestimated.
We need to remember that most of our electricity
is generated from a relatively small number of large power stations,
usually sited well away from centres of population. The introduction
of electricity generated on a small scale locally is still a very
new concept to most people and needs explanation if it is to gain
broad acceptance and support.
The acceptability to the public of renewable
energy is certainly a challenge but the Government firmly believes
that a partnership approach, involving regional organisations,
industry and local people is not only the most democratic way
forward but the most likely to be successful in reaching our national
aims and targets. We have taken only the first steps in this process
but work on this will start speeding up in the next few months.
The Government will continue to promote public awareness of climate
change issues such as through the television advertising campaign
"are you doing your bit", for instance, with its strong
emphasis on energy efficiency, and is considering how best to
promote further awareness of renewable energy. For example, DTI
is backing the Science Museum's plans for a major exhibition on
energy which will feature a significant renewables element.
The whole question of the promotion of renewable
energywhether a Campaign for Renewables, as Lady Sharp
has suggestedor other means, is being considered and our
plans for promotional work will be included in the Government's
future renewables strategy. I am quite sure, though, that we shall
not require a renewables "czar".
I would also mention that the Government has
supported a number of community renewables projects and published
material to stimulate further interest in community-owned projects
but interest in developing such projects has, unfortunately, been
Earl Cathcart pinpointed the Committee's proposal
for a new renewable energy agency.
I do not find the case persuasive. There is
already close liaison at both Ministerial and official level,
with DTI firmly in the lead in Whitehall on renewables. Renewable
energy policy covers a wide range of areas including energy efficiency,
energy policy, sustainable development, housing, planning, health
and taxation. It would be impossible for a single agency to be
able successfully to cover all these areas. And if they were brought
together it would simply create another set of co-ordination problems.
Lord Cranbrook raised the question of waste
management strategy. The Government believes in an integrated
waste management strategy based on Best Practicable Environmental
Option for each location. It is set out in the draft waste management
strategy for England and Wales A Way With Waste, published
on 30 June this year. Planning guidance for waste management was
set out in PPG 10 on 14 September.
The general approach is to encourage waste minimisation
and recovery, then waste recycling, then disposal. We expect a
shift from landfill towards waste combustion owing to pressures
on landfill sites, landfill tax and the EC Landfill Directive
and I can assure Lord Cranbrook that we are very keen to use waste
combustion for electricity generation and combined heat and power.
At present, NFFO encourages both electricity generation and combined
heat and power through separate pricing bandsthe challenge
for combined heat and power is to find attractive heat loads.
On co-incineration, high-calorific wastes can
usefully displace fossil fuels in some industrial processes and
should be considered as an option in these cases, subject to pollution
I would like to emphasise today the Government's
firm commitment to renewable energy development and promotion.
We see renewable energy playing an increasingly important part
in our future energy supply and a vital component of our contribution
as a nation to climate change targets not only now but particularly
As the Committee pointed out, a regional approach
and improved public perception of the benefits of renewables are
the key to winning the much wider popular support we would like
to achieve. The Government intends to devote considerable effort
to these important activities and they will be moving up the agenda.
We believe that existing policies have been
successful in driving down renewable energy prices and in establishing
a good foundation of installed capacity in this country. We now
need to build on this foundation, working with the grain of the
competitive energy markets and ensuring that renewable generation
is not disadvantaged in any way in the new electricity trading
The new powers we propose taking will provide
the legislative basis to ensure that we continue moving towards
our target of supplying 10 per cent of electricity from renewable
sources. These powers will also ensure that the momentum is maintained
so that, even after 2010, the share of renewables can rise in
response to the need to limit greenhouse gas emissions to sustainable
levels. We will also ensure that existing NFFO contracts can continue
in the reformed electricity market.
Following a consultation process earlier this
year, the Government expects to announce further details of its
policy on renewable energywhich will have to take into
account a number of broader economic, environmental and energy
policiesas soon as possible.
Finally, I would re-iterate my thanks to the
Committee for their balanced and considered approach to the subject
of renewable energy. I found their comments particularly helpful
in taking forward Government thinking on this important topic.